More bad news on insurance

Published: Tuesday, January 18, 2011 at 8:38 a.m.

Last Modified: Tuesday, January 18, 2011 at 8:38 a.m.

People around here have become accustomed to ever-climbing prices for homeowners insurance and an ever-shrinking pool of insurance companies willing to offer coverage at any price.

The latest development is another unwelcome increase in price and decrease in coverage.

State Farm announced Monday that it will raise insurance rates by an average of 21.1 percent on local landlords and will drop its offering of wind coverage on rental properties across south Louisiana.

This move is just the latest indication of the problem that faces homeowners across the Gulf Coast, a problem that reached major proportions after hurricanes Katrina and Rita struck in 2005.

In this case, assuming the landlords will pass along their increased costs to tenants, the renters will bear the brunt of the rate hike.

Even more disconcerting, though, is the prospect of losing another insurer from the tiny pool of those still operating in our region, even further exasperating the dilemma.

The crux of the problem is that so few companies offer insurance coverage many homeowners are left with no choice but to get coverage from the state-run insurer of last resort, Citizens.

That means that in the event of a catastrophe, the state will be on the hook for much of the loss.

Ideally, Louisiana should attract more insurance companies willing to offer their products along the coast. As that happens, homeowners would see rates become at least slightly more competitive.

Unfortunately, those companies are unwilling — as seen in the case of State Farm — to offer coverage here. They see the risk as too high.

The long-term solution is for the state to work with the federal government to solve some of the coastal-erosion and flood-protection issues that make our risk so great.

That will mean an unprecedented investment in fighting some of these problems that have plagued us for decades but that have been increasingly disruptive in recent years.

In the short term, homeowners have little choice but to pay the increased prices and beg the government to begin addressing the underlying problems.

Every time there is news from the insurance industry, it seems, it is bad news for local residents. The news this week was no different. However, if we use this as more evidence to fight for the changes that will help us, it might have a bit of an upside.

Editorials represent the opinions of the newspaper, not of any individual.

<p>And the hits keep coming.</p><p>People around here have become accustomed to ever-climbing prices for homeowners insurance and an ever-shrinking pool of insurance companies willing to offer coverage at any price.</p><p>The latest development is another unwelcome increase in price and decrease in coverage.</p><p>State Farm announced Monday that it will raise insurance rates by an average of 21.1 percent on local landlords and will drop its offering of wind coverage on rental properties across south Louisiana.</p><p>This move is just the latest indication of the problem that faces homeowners across the Gulf Coast, a problem that reached major proportions after hurricanes Katrina and Rita struck in 2005.</p><p>In this case, assuming the landlords will pass along their increased costs to tenants, the renters will bear the brunt of the rate hike.</p><p>Even more disconcerting, though, is the prospect of losing another insurer from the tiny pool of those still operating in our region, even further exasperating the dilemma.</p><p>The crux of the problem is that so few companies offer insurance coverage many homeowners are left with no choice but to get coverage from the state-run insurer of last resort, Citizens.</p><p>That means that in the event of a catastrophe, the state will be on the hook for much of the loss.</p><p>Ideally, Louisiana should attract more insurance companies willing to offer their products along the coast. As that happens, homeowners would see rates become at least slightly more competitive.</p><p>Unfortunately, those companies are unwilling — as seen in the case of State Farm — to offer coverage here. They see the risk as too high.</p><p>The long-term solution is for the state to work with the federal government to solve some of the coastal-erosion and flood-protection issues that make our risk so great.</p><p>That will mean an unprecedented investment in fighting some of these problems that have plagued us for decades but that have been increasingly disruptive in recent years.</p><p>In the short term, homeowners have little choice but to pay the increased prices and beg the government to begin addressing the underlying problems.</p><p>Every time there is news from the insurance industry, it seems, it is bad news for local residents. The news this week was no different. However, if we use this as more evidence to fight for the changes that will help us, it might have a bit of an upside.</p><p>Editorials represent the opinions of the newspaper, not of any individual.</p>